Editing Layoff (section)

{{Short description|Involuntary termination of employment of an employee due to business concerns}}
{{Distinguish|Degrowth|Shrinkage (disambiguation){{!}}Shrinkage}}
{{Globalize|date=February 2020<!-- "Around the world" should not be a minor section. The article should have a global perspective, with individual countries treated individually -->}}

A '''layoff'''<ref name=camb>{{cite web |url=http://dictionary.cambridge.org/dictionary/british/layoff |title=layoff noun – definition in British English Dictionary & Thesaurus – Cambridge Dictionary Online |publisher=Dictionary.cambridge.org |access-date=2012-03-13 |archive-date=2012-03-02 |archive-url=https://web.archive.org/web/20120302003050/http://dictionary.cambridge.org/dictionary/british/layoff |url-status=live }}</ref> or '''downsizing''' is the temporary suspension or permanent [[termination of employment]] of an [[employee]] or, more commonly, a group of employees (collective layoff)<ref name=govuk>{{cite web|url=https://www.gov.uk/redundant-your-rights/consultation|title=Redundancy: your rights|work= www.gov.uk |access-date=2015-02-11|archive-date=2018-11-06|archive-url=https://web.archive.org/web/20181106220444/https://www.gov.uk/redundant-your-rights/consultation|url-status=live}}</ref> for business reasons, such as personnel management or downsizing an organization. Originally, ''layoff'' referred exclusively to a temporary interruption in work, or [[employment]]<ref name="LaborTerm1921">{{cite journal|publisher=Harvard University. Graduate School of Business Administration|title=Labor Terminology|journal=Bulletin of the Bureau of Business Research|date=1921|volume=25|page=50|url=https://books.google.com/books?id=VPQsAAAAYAAJ&pg=PA50|access-date=8 January 2017}}</ref> but this has evolved to a permanent elimination of a position in both British and US English,<ref name=camb/>{{Failed verification|date=January 2017}} requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with [[Wrongful dismissal|wrongful termination]]. 

''Laid off workers'' or ''displaced workers'' are workers who have lost or left their jobs because their employer has closed or moved, there was insufficient work for them to do, or their position or [[Shift work|shift]] was abolished (Borbely, 2011).<ref name="b1">{{cite web|url=http://www.bls.gov/cps/lfcharacteristics.htm#displaced|title=Labor force characteristics|date=October 18, 2010|work=Labor Force Statistics from the Current Population Survey |publisher=Bureau of Labor Statistics|access-date=20 October 2010|archive-date=11 December 2020|archive-url=https://web.archive.org/web/20201211013147/http://www.bls.gov/cps/lfcharacteristics.htm#displaced |url-status=live}}</ref><ref name="glossary">{{cite web|url=http://www.bls.gov/bls/glossary.htm|title=Glossary|publisher=Bureau of Labor Statistics|access-date=20 October 2010|archive-date=6 May 2009|archive-url=https://web.archive.org/web/20090506220213/http://www.bls.gov/bls/glossary.htm|url-status=live}}</ref> Downsizing in a company is defined to involve the reduction of employees in a workforce. Downsizing in companies became a popular practice in the 1980s and early 1990s, since it was seen as a way to deliver better shareholder value by helping reduce the costs of employers (downsizing, 2015). Research on downsizing in the US,<ref>{{cite book |last1=Baumol |first1=William J. |last2=Blinder |first2=Alan S. |last3=Wolff |first3=Edward N. |title=Downsizing in America: Reality, Causes, and Consequences |date=2003 |publisher=Russell Sage Foundation |isbn=978-1-61044-031-8 }}{{pn|date=February 2025}}</ref><ref>American Management Association annual surveys since 1990.{{full|date=February 2025}}</ref> UK,<ref>{{cite journal |last1=Sahdev |first1=Kusum |last2=Vinnicombe |first2=Susan |last3=Tyson |first3=Shaun |title=Downsizing and the changing role of HR |journal=The International Journal of Human Resource Management |date=January 1999 |volume=10 |issue=5 |pages=906–923 |doi=10.1080/095851999340224 }}</ref><ref>{{cite magazine |id={{ProQuest|195693766}} |last1=Chorley |first1=David |date=May 2002 |title=How to: Manage downsizing |magazine=Financial Management |page=6 }}</ref><ref>Mason 2002{{full citation needed|date=March 2022}}</ref><ref>Rogers 2002{{full citation needed|date=March 2022}}</ref> and Japan<ref>{{cite journal |last1=Mroczkowski |first1=Tomasz |last2=Hanaoka |first2=Masao |title=Effective rightsizing strategies in Japan and America: Is there a convergence of employment practices? |journal=Academy of Management Perspectives |date=May 1997 |volume=11 |issue=2 |pages=57–67 |doi=10.5465/ame.1997.9707132151 }}</ref> suggests that downsizing is being regarded by management as one of the preferred routes to help declining organizations, cutting unnecessary costs, and improve organizational performance.<ref>{{cite conference |last1=Mellahi |first1=K |last2=Wilkinson |first2=A |date=September 2004 |title=Downsizing and Innovation Output: A Review of Literature and Research Propositions |conference=British Academy of Management Conference }}</ref> A layoff usually occurs as a [[cost reduction|cost-cutting]] measure. A study of 391 downsizing announcements of the S&P 100 firms for the period 1990–2006 found that layoff announcements resulted in a substantial increase in the companies’ stock prices and that the gain was larger when the company had prior layoffs. The authors suggested that the stock price manipulation alone creates a sufficient motivation for publicly-traded corporations to adopt the practice of regular layoffs.<ref>{{cite journal |last1=Schulz |first1=Ann-Christine |last2=Himme |first2=Alexander |title=Stock market reactions to downsizing announcements: an analysis through an institutional lens |journal=Socio-Economic Review |date=22 November 2022 |volume=20 |issue=4 |pages=1825–1855 |doi=10.1093/ser/mwab046 }}</ref>